Cygnus Puts Ag Group on the Block
Deal aims to bolster the company's balance sheet.
Corporate Solutions, an acquisition advisory firm, has been retained to help secure a buyer.
Cygnus CEO John French says in a statement that the sale will "provide us with an opportunity to improve our overall balance sheet and provide a substantial return to our ownership group."
The assets, he says, are profitable and the group is a "discrete business." A sale would not adversely impact the other affinity groups within the company.
The remainder of the company is not on the market.
One obvious, but not confirmed, bidder would be Penton, which just spent $80 million on Farm Progress Companies last November.
UPDATE: According to French, Cygnus’s balance sheet is in good shape, but after increasing interest from other parties in buying the group, and a well-performing agriculture market, the time became right to sell.
About 12 employees work in the group.
"We’re still owned by banks and by that definition at some point we’ll have to sell the company," he says. "My job has been to come in and take the company out of bankruptcy and improve value. And the ag group is the first manifestation of that value increase. I’ve had more calls about the ag group than any other in the company."
The decision to put it up for sale, says French, was all the easier in that the ag group is not core to the company’s affinity group structure. "We don’t have anything else around it," he says.
French declined to reveal pricing or revenue details, but said they’re seeking a very competitive bid or they’re not going to sell. "We’re going for a good market price, and if we don’t get it, then we’re not selling and it’s business as usual," he says.